Deforestation is the second largest source of CO2 emissions after consumption of fossil fuels. So-called PES programmes, where landowners are paid to replant or protect forests, have been promoted as a way to reduce deforestation. However, the effectiveness of the programmes has been questioned, and new research from the School of Business, Economics and Law at the University of Gothenburg, Sweden, points to potential negative long-term effects and a need for broader guidelines and policies.
PES programmes have been promoted as a cost-effective tool to combat climate change. However, the rather limited documentation on the effectiveness of the programmes is discouraging.
'Human behaviour is not always predictable, and short-term positive effects may turn to negative effects in the long term,' says Anna Nordén, economics researcher at the School of Business, Economics and Law, University of Gothenburg.
In her recently presented doctoral thesis titled "Essays on Behavioral Economics and Policies for Provision of Ecosystem Services," Nordén explores the weaknesses of PES programmes and the importance of complementing them with additional measures.
The established climate targets make the measurability of PES programmes appealing – it is tempting to point to results by quantifying forests that would probably have been cut down in the absence of PES programmes. Paying landowners for abstaining from deforestation is considered the most effective programme design. However, this strategy implies that those who are already maintaining their forests are not rewarded. Nordén conducted experiments to identify the consequences of such programmes, and found that those who are already displaying the desired behaviour tend to eventually lose their willingness to protect their forests.
'The net effect of these programmes may be negligible, meaning that the money spent may not do much to reduce emissions and combat climate change,' says Nordén, who calls for better awareness of the effects of different reward systems.
Nordén also studied what motivates landowners to participate in PES programmes and how they react to the size and type of the payments they receive. In a study in Costa Rica, landowners were offered either cash or education.
'Both payment types stimulated participation, but when we looked at long-term participation – more than five years – cash had a greater effect. And the more cash the landowners were offered, the more motivated they were to participate in the programme. They did not respond the same to more education.'
Yet cash payments can also have negative effects on the climate. Nordén gives an example:
'When a poor landowner is paid in cash, he may become able to pay somebody to cut down his forest.'
Nordén is critical to the narrow focus of climate negotiations on PES programmes.
'It seems naive to believe that just one policy will reduce deforestation. My research points to the importance of complementing the programmes with other tools and measures, and of paying better attention to long-term effects.'
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The thesis "Essays on Behavioral Economics and Policies for Provision of Ecosystem Services" was presented on 24 May 2013.